Macy's List Of Priorities

Macy's List Of Priorities: A Win-Win For Customers and Profits

There are many reasons why Macy’s continues on a profitable path. Some of these reasons include:

Macy’s Department Store in New York City. (Photo credit: Wikipedia)

1.       Priority in Merchandising – The Company is striving to have the best and latest fashion for their customers in every store. Much of it is exclusive since 50% is private label merchandise. The stores exude this merchandise excitement.

2.      Priority in Merchandise – Macy’s focuses on having the best assortment in every classification – sometimes it may require leasing space to specialists such as Sunglass Hut, Finish Line, and Locker Room by Lids. These specialists offer the widest assortment of brands and know what the customer wants in the category.  In many cases Macy’s was unable to get some of the brands the specialists offer. Bloomingdale’s has been able to get more foreign labels through concession arrangements with some overseas vendors. This has worked out well–the leased shops are replenished on a frequent basis which keeps builds consumer loyalty.

3.      Priority in Delivery – Macy’s is working on taking Internet orders that the customer can then choose to pick up in the store of choice or have delivered to their home.  This initiative will be completed by the end of July allowing every Macy’s store to service the customer quicker. Many customers are not at home to receive deliveries so the in-store pick up choice suits their needs. Also, 90% of all returns are made to stores, which adds to store traffic and sales.

4.      Priority for International Customers — Foreign customers are serviced by a New York based Borderfree enterprise. This arrangement lets customers shop on the Macy’s Internet site anywhere in the world. The website looks like a Macy site but the fulfillment is handled by Borderfree, thus assuring compliance with local laws and customs. Prices differ from the domestic site allowing Borderfree to execute the actual delivery and receive a commission. The arrangement ensures quick and safe delivery. While global Internet sales are still a very small portion of Macy’s business, I see the potential for growth.  Eventually I see Macy’s  taking over international fulfillment themselves and eliminating the costly middle man.  Notably, Borderfree is used by many retailers such as Bloomingdale’s, Macy’s, Neiman Marcus, Saks Fifth Avenue, Lands’ End, Barneys New York, J. Crew and others.

5.      Priority for Stores — Macy’s reviews its store base continuously and closing unprofitable stores. However, ecommerce has created renewed momentum for some stores. Surprisingly some of the smaller stores have been successfully gaining sales as Internet shoppers in these locales frequently return merchandise to these stores and then shop while in the store.

6.      Priority for Training Associates — I believe this is a factor in Macy’s growth and profitability.  Management has trained cadre of associates who embrace new opportunities in merchandise and communicate with customers using the most advanced mobile devices.  Ideas are created through display, through strong messages in print media, and vibrant images on in-store mobile screens. Social networks also help spread company news. There are people trained to step into any job that opens up. This suggests the investment in associate training has developed skills at the associate level that don’t exist in many other companies.

In my opinion Macy’s is setting the right priorities to keep its store base exciting while also embracing Internet shopping.  Its approach is a win-win for customers, associates, and shareholders.